CEO Succession Planning
Health care CEO turnover rates are increasingly high and will likely continue based on the changing landscape and as members of the baby boom generation retire. Developing a succession plan – before a turnover becomes imminent or the unexpected happens – is essential. Inter-Growth Senior Project Manager/Recruiter, Carol Ann Barber, notes, “Succession planning is one of the key tasks for an organization’s leader. If this is not done, decisions become reactive rather than proactive and the organization suffers.”
Most organizations have only begun succession planning at some level, which can create a false sense of security. The following tips can help ensure your organization’s succession plan is well developed and operational:
- Create a realistic schedule – Boards should treat succession planning as an ongoing process, rather than a static one. Establish milestones and identify a consistent schedule to develop the plan.
- Define who is responsible for succession planning – The Board, the CEO, the Chief Human Resources Officer, and other senior leadership must work together to prepare successors for the CEO position and ensure that other executives are rising from further down on the management pyramid to fill other vacancies.
- Create a written succession plan – Develop specific, detailed steps that can be carried out should a sudden departure occur. These should include emergency measures for immediate/interim leadership as well as steps to secure a permanent replacement.
- Define a list of “must haves” for the new leader (What specific skills/attributes/capabilities must be demonstrated by a new CEO).
- Identify any internal candidates from your senior talent pipeline who have the skills and experience to match your defined “must haves”.
- Make the plan private, with only a small group of key leaders privy to the plan to avoid complications and designate an appointee to “hold” the plan.
- Establish regular intervals for updating the plan – Once the plan is developed, make sure that the Board devotes meaningful time to updating it, rather than simply checking off the box of a meeting agenda. The plan should be updated at least yearly or sooner when there is a substantial change in the organization’s structure or processes.
- Groom the senior team – Create an environment to encourage growth and development of senior team members. Conduct regular, in-depth reviews. By paying attention to internal capabilities and candidates, a replacement will be identified more easily.
Having a specific plan to quickly put in place can minimize the tension and costs associated with CEO turnover. Does your organization have a succession plan? What has been your experience, both good and bad, with succession planning? Let us know your thoughts.